Islamabad - The National Electric Power Regulatory Authority (Nepra) on Tuesday approved Rs 4.36 per unit reduction in power tariff for February 2016.

The authority also expressed its displeasure with the Central Power Purchase Agency (CPPA) for producing costlier electricity from the imported Re-Liquefied Natural Gas (RLNG), instead of exploiting cheaper fuel. The adjustment/relief will be available to the domestic consumers in entire Pakistan, except in Karachi and the lifeline consumers.

The reason for not providing relief to the consumers of K-Electric is that it is a privatised company, and distributes its own generated electricity to the consumers.

Besides the consumers of K-Electric, the relief will also not be available to the lifeline consumers, consuming up to 300 units per month, as they are already being provided subsidised electricity. The relief will reach the consumers through their next month’s electricity bills. In a public hearing held here, NEPRA questioned from the CPPA, as to why did it change the merit order in power generation?

CPPA General Manager Muhammad Ilyas replied that as there were plenty of RLNG shipments in the country, so CPPA used more gas for power generation than other fuel sources despite the fact that RLNG generation was costlier.

The authority noted that due to costly power generation, billions of rupees were swindled from the consumers that ultimately landed in the pockets of blue eyed persons. “The power plants, with the capacity to generate electricity at the price of Rs 4.5 per unit, were partially operated and instead expensive electricity was generated by using RLNG and High Speed Diesel (HSD). The cost of RLNG per unit was Rs 8.30 while the HSD was Rs 11.78,” the authority noted.

NEPRA Chairman Brig (R) Tariq Saddozi deplored that despite loadshedding in the country, the government was not running the cheaper power generation plants with full capacity and was opting for the costlier power generation. Member Punjab Khawaja Naeem said that CPPA and NTDC had committed a financial crime.  

“Had they followed a proper merit order to generate power from a less costly source, the authority would have reduced Rs 5.50/unit under the monthly fuel price adjustment,” he added. During February, 6397.43(GWh) electricity was generated from all sources at Rs 21.475 billion.

The authority noted that out of this total generation, 22.83 percent (or 1460.28 GWh) electricity was generated from Gas (RLNG) at the average cost of Rs 6.035/unit, while from Residual Fuel Oil 33.34 pc (or 2133 GWh) was generated at the average cost of Rs5.2545/unit.

Share of hydel power was 35.60 percent (2213.26 GWh) with zero cost, High Speed Diesel (HSD) based electricity 0.05 percent with Rs11.78/unit cost, Nuclear 6.32pc (404.35 GWh) at Rs1.158/unit, imported electricity from Iran 0.51pc (32.68 GWh) at Rs10.6 a unit, mixed 0.47pc (30.29 GWh)at Rs7.177/unit, Baggasse 0.97pc (61.87 GWh) at Rs5.7978/unit, share of wind was 0.61pc (39.29 GWh) and solar 0.22 percent 13.83 GWh and both with zero input cost. 

The CPPA had sought from the NEPRA Rs 3.636/unit cut in power rates for February 2016 for all public-run distribution companies.

Admitting the CPPA’s tariff petition, Nepra decided to hold a public hearing on March 29, 2016 before passing on the relief in the upcoming billing month.

After the hearing, presided over by the NEPRA chairman, the decision was taken.

The officials of CPPA and National Transmission and Despatch Company (NTDC) were admonished for not providing information about running power plants on less expensive furnace oil.

The CPPA official told that all power plants were operated as per merit order, and all information would be provided to the NEPRA.

Merit order is a way of ranking available sources of power generation based on ascending order of price.

Under the order, those power generation units with the lowest marginal costs are the first ones to be brought online to meet demand, and the plants with the highest marginal costs are the last to be brought on line.

On the directive of NEPRA the NTDC, for the first time, has agreed to provide to the authority access to the real time data of the electricity production. According to NTDC, they will provide a password to NEPRA for accessing the data.

Earlier the Ministry of Water and Power had stopped the NTDC from providing direct access to NEPRA.